A bipartisan bill advancing through Congress would double the capital gains tax exclusion for home sales, raising the threshold to $500,000 for single filers and $1 million for married couples filing jointly.

The More Homes on the Market Act targets a core issue in today's housing shortage. Homeowners sitting on properties with substantial gains often hesitate to sell because of steep tax bills. The current exclusion caps at $250,000 for singles and $500,000 for couples. Doubling these thresholds removes a financial barrier that keeps homes off the market.

For sellers, the impact runs deep. A homeowner in an appreciating market, particularly in high-cost metros, could pocket significantly more cash after a sale. Someone selling a home in a strong real estate market might avoid a six-figure tax hit entirely under the new rules. This shifts the math for downsizers, relocators, and empty-nesters who currently delay sales to minimize tax exposure.

Buyers benefit from increased inventory. More homes listed means less competition per property and potentially softer prices in tight markets. The supply crunch has gripped the market for years, keeping prices elevated and affordability out of reach for many.

Landlords and investors also win. Property owners sitting on rental homes or investment properties face similar tax disincentives when selling. Higher exclusions make exit strategies more viable, potentially loosening up institutional and individual investor holdings.

The bill's momentum matters. Congressional support from both parties signals real possibility of passage. The National Association of Realtors has backed the measure, viewing it as a practical solution to the inventory crisis without direct government spending.

Timing remains uncertain. Congress must navigate competing priorities and budget concerns. The Treasury Department may raise revenue concerns about foregone tax income, though supporters argue the economic stimulus from market activity offsets losses.

For now, sellers with significant gains should track